Apparently Seattle has gone fully insane. Look at this picture. The price of Gatorade has increased almost 100% because of the new ‘tax’ on sugary drinks.
So, think about this for a second. What are the unintended consequences of this tax? I’ll wait here while you digest this.
If you said people will drink less sugary drinks, you are correct. Absolutely that will happen. But then ask yourself what will they drink instead?
Will ALL people stop drinking sugary drinks? Of course not. So what happens to them?
Well, either they pay the high price of sugary drinks OR they get their sugary drinks elsewhere. Either way, they will get their drinks and thus avoid the Seattle tax on sugary drinks.
I can hear you now, “Well what’s the problem with that Scandlen, as long as ONE LIFE is saved by taxing sugary drinks, it makes it worth it!” Uh huh
And here is where the prohibitionists ALWAYS lose their argument; How many lives are destroyed while saving that “one life?” After all, there WILL still be people who drink sugary drinks. Thus they will spend more money to buy that drink in Seattle. Money which will no longer be used for things like a gym membership, medicine, wholesome foods etc.
Or those people may go to neighboring counties to buy their sugary drinks. In that case, they’ll be more cars on the road, creating more possibilities for accidents. Car accidents are still one of the leading causes of death in the US, never mind the damage to human beings getting hurt if not killed as well as all the loss of economic production when a victim is laid up.
Those numbers are never cited by the prohibitionists of course because they can’t be tracked. So, the prohibitionists get a free ride. They get to say they are “saving lives” without ANYONE being able to challenge them that in actuality they are hurting more than they are helping.
Of course, there is ALWAYS a third way a Seattle resident could get a sugary drink; the black market.
There will always be a black market to take advantage of the government-created arbitrage that exists between the true price of a good and the fiat price.
In this case the true price of a good, Gatorade, is $15. The fiat price is $26 because of the tax. A smart entrepreneur would say “Screw that” I’m going out to the county and buy a ton of gatorade and then I’ll go door to door selling this crap for say $20. I make a 33% profit which is the premium I get paid for taking the risk of engaging in this illegal activity. The customer, while paying more than before, still saves over 25% from the government-created inflated price, so he is happy too. It’s a win/win for everyone BUT THE GOVERNMENT.
Let’s take a real world example of this with a man named Eric Garner.
Here was a man who just a few years previously was doing nothing illegal. Yet because of the NYC law to stamp out smokers he saw an arbitrage opportunity by selling individual smokes to willing customers. MInd you he was not forcing his product on people. He was just providing a service to people who wanted a cigarette.
But the law said he couldn’t do that. He was willing to take on the risk of “illegality” of his business by charging a premium for each product he sold…again to a willing buyer. As long as the profit was above and beyond his risk, it was a worthy venture for him.
Of course, no one would have expected him to be KILLED by peddling individual cigarettes in the street to, again, WILLING buyers but that is exactly what happened. He was manhandled by police in his commission of a crime, where he suffocated to death. Remember, his crime was selling individual cigarettes to people who were willing to pay him for those cigarettes.
So, Mr. Garner is dead. But is his death attributed to a law that was passed to “save lives” by keeping people from smoking? Of course not! His death is solely attributed to rogue police officers.
Unfortunately, the cops aren’t as much to blame as the stupid law that they MUST enforce. It’s that law that made the cops take down Mr. Garner due to the fact that he truly was breaking the law. But it’s the law that’s the problem from the beginning.
One might wonder why I lump in prohibition with this in my title of this post. It’s simple actually. Prohibition is nothing more than the banning of a good or service. I don’t care if that good or service is banned outright or if it is taxed to oblivion it’s making it PROHIBITIVE to engage in legally.
And once it becomes prohibitive to engage in legally, there will be a black market created. We know what happens with black markets, especially ones where the profits margins are huge; The most brutal elements of society do whatever they can to corner those markets by any means necessary.
You make an activity outside the law, every person who engages in such activity becomes a criminal, even if heretofore that person was the most law-abiding citizens there could be. The true criminals rejoice of course because now their competition is limited to only those who have the guts to engage in illegal activity.
Most people don’t want to take the risk of going to jail. But some do. And those who do, will do so brutally, especially if the profit margins are huge.
In Eric Garner’s case, the real brutes didn’t see enough of a profit margin to get too heavily involved, yet. So, Eric Garner didn’t have to worry about a drive by shooter taking out his competition in the individual cigarette market.
But just wait. The more our loving government makes things illegal via insane taxation or outright banning, the more profits there’ll be for those who are willing to play outside the law. And the more crime there will be.
Just remember that the next time someone you know proposes a banning of a product in order to “save lives”. Ask ’em, “what about Eric Garner?”